Ahmad Hamad Algosaibi and Brothers Company (AHAB) said that it had struck a deal with a former Bahrain resident in a move to recover billions of dollars, which were allegedly siphoned off in a massive fraud involving banks in Bahrain.

AHAB announced yesterday that it had reached a settlement with American citizen Glenn Stewart, who has apparently agreed to provide information about events and transactions that left the Saudi partnership approximately $9 billion in debt, reported the Gulf Daily News, our sister publication.

In exchange, claims against the former head of Bahrain's The International Banking Corporation (TIBC) are being dropped.

AHAB's global legal co-ordinator Eric Lewis said the settlement made sense for AHAB, as it attempts to reorganise its debts and refocus its legal efforts.

"We have confidence that we would have proven our allegations at trial, but were looking at two years to trial, likely appeals and then a further international asset-tracing exercise through an array of offshore jurisdictions that could have been both time-consuming and expensive," he explained.

Lewis also stated that Mr Stewart's agreement to provide information that could be used in AHAB's litigation against other participants "at the end of the day is far more valuable than any monetary recovery against him as an individual".

AHAB sued Stewart, a resident of Newport Beach, California, in 2011 in parallel with its claims against Saudi businessman Maan Al Sanea and his group of companies known as the Saad Group.

AHAB alleged that Stewart aided and abetted fraud and committed breach of trust and misappropriation of funds.

He tried unsuccessfully to delay the case and then have the case dismissed, as well as filed a counterclaim for malicious prosecution which the court rejected.

The case has been in active discovery during 2013 and was scheduled for trial in 2015.

However, AHAB said the settlement with Stewart did not affect various civil and criminal proceedings ongoing against Al Sanea.

AHAB claims TIBC and Awal Bank, which were both established in Bahrain, were used to siphon off huge amounts of money through unauthorised borrowings in its name.

More than 100 banks are still trying to recover billions in outstanding loans.

A criminal trial is currently underway in Bahrain against senior executives at TIBC and Awal Bank and separate reports have been commissioned by Ernst & Young and Kroll and Hibis International.

However, Stewart violated a travel ban and fled Bahrain in May, 2010. Before fleeing Stewart got involved in the film industry and is credited as executive producer for films including The Messenger, a 2009 movie nominated for two Academy Awards, and Lesbian Vampire Killers. – TradeArabia News Service